Ether prices dropped to $0,10 in a GDAX flash crash, after whale sold 100,000 Ether
We all know cryptocurrencies are extremely volatile, but no one really expects the second biggest cryptocurrency, Ethereum, to completely plunge in a matter of minutes in one of the most reliable and popular exchanges.
Today, on GDAX – Coinbase’s cryptocurrency exchange – Ether prices plummeted from about $365.79 to about $0,10 in only a few minutes and then quickly recovered once again, according to GDAX data. The reason behind it was a 100,000 Ether sell order that completely filled the order book
The move was so severe that Coinbase shut down the ETH/USD currency pair and said that it is now investigating the occurrence. The company also decided to block ether withdrawals for the time being. Right now, it isn’t clear whether this was caused by someone making a terrible mistake, by someone manipulating the market, or by a glitch in GDAX itself. As a result, Ether prices plummeted to about $338.
The wallet from which the money came from is likely this one, as users quickly pointed out that someone had been holding for 692 days before transacting at the time of the flash crash.
• https://etherscan.io/address/0x7d551397f79a2988b064afd0efebee802c7721bc
Affected customers
As a Reddit user was quick to point out on Coinbase’s subreddit, margin orders were liquidated and, as such, some users lost incredibly large amounts of money. This user, named DontchawantaSanta, reportedly lost $10,000 because of the incident, as his margin got called because of Ether’s price plummeting.
Although some users were sympathetic, others point out that that margin trading with cryptocurrencies is extremely dangerous as something like this can occur. It’s also clear, however, that someone made the deal of a lifetime as it was possible to buy Ether at about $0.10 at a very specific moment.
Another redditor, who fell victim to the sell order, asked if he was screwed since GDAX is unlikely to give him his money back. In response, reddit user dofubrain reminded him that at the end of the day, it’s just money:
I'm sorry for your loss. But in the end, it's just money, you can always earn more. Most important thing is to learn from this situation.
Very interesting case. I'm curious to hear what GDAX has to say about this, because no matter how you look at it, a pricedrop from $365 to $0,10.. That's ugly!
For the love of God, put in some circuit breakers ala NYSE or NASDAQ. I realize it can be difficult to determine what thresholds would trigger the breakers given the extreme volatility of cryptocurrencies, but further instances like today will result in the regulators stepping in.